What is a SPAC?

A SPAC, Special Purpose Acquisition Vehicles, is a shell company, with no operations, incorporated by an experienced management team, the Sponsors, to raise capital through an IPO and be listed on a Stock Exchange

Proceeds raised in the capital markets are then used to acquire a target company or business in any form, including a business combination or a merger (the so called Business Combination). As a result of the Business Combination the shares of the Target company are listed on the Stock Exchange.

SPACs have a predetermined time horizon to complete the Business Combination: if no transaction is completed within that timeframe the SPAC is liquidated.

The Business Combination shall be approved by the shareholders meeting of the SPAC. Shareholders not in favor of the Business Combination are entitled to exercise a way out right and their shares be redeemed. If shareholders, voting against the transaction or exercising their way out rights, exceed a predefined threshold, the Business Combination is not completed.